Cryptocurrency
Invented in 2008 by Satoshi Nakamato (unknown guy)
Cryptocurrency: “any form of currency that only exists digitally, that usually has no central issuing or regulating authority but instead uses a decentralized system to record transactions and manage the issuance of new units, and that relies on cryptography to prevent counterfeiting and fraudulent transactions.”
In short, it is a digital currency that is not owned by the government and uses mathematics to prevent fraud and ensures security.
Since it is decentralized, you can gain back control over your money.
What are the differences?
| Cryptocurrency | Fiat money |
| Ran by a vast collection of computer network | Ran by the government |
| Finite: Bitcoins have a cap supply of 21 million coins (Finite source like gold) | Infinite: no one knows how much money has been printed to begin with and how much are in circulation |
| Deflationary (worth more over time) | Inflationary (worth less over time) |
| Follows Austrian school
(believes that printing money is a silent robbery by inflation) |
Follows Keynesians school
(Banks) |
| Uses blockchain for transaction | Uses Banks and middlemen for transactions |
| Millions of computers agree on a global record of the history of all transactions that have ever taken place in the system (ledger). So all your transactions are recorded by all the people in the system. Since everyone is monitoring the system, it is impossible to create fraud cryptocurrency. (except if you manage to fool 50% of the block) | Trust Bank |
| Money “mined” (like gold) to be placed in the system | Money created by printing |
| Extremely beyond imagination hard and nearly impossible to hack | Has been hacked in past and are targets to be hacked |
| Low entry barriers since you don’t need a bank account or government permission to get bitcoins. Only software and internet is required. | To use banks you need to deal with banking systems |
| You are responsible for your own money. The government has no interest in protecting you against cyber attacks. | The police or bank will help you get a refund or catch the thief |
| Transitions are recorded forever and everyone can see them. Violates the right to be forgotten. | Deals are not held for public |
Useful currency in some places:
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Useful in platforms:
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Alternatives to money:
- Resource-based economy
‘In a Resource Based Economy all goods and services are available to all people without the need for means of exchange such as money, credits, barter or any other means. For this to be achieved all resources must be declared as the common heritage of all Earth’s inhabitants. ‘
~a definition by the venus project
WHAT DOES THIS MEAN? – Simply put, it means that natural resources are declared as free goods and therefore all human beings have access to them. This may sound astounding because of the fact that it challenges the basic economic problem (scarcity) by saying that it is not that resources are limited but what mankind chooses to do with the resources has boundaries. It then argues that highly advanced use of technology and further scientific advancements in the future help us maximise the potential use of the resources that occur naturally, thus not only terminating scarcity but creating abundance.
The founding fathers of this notion point out that our current global problems of the free market capitalist system cannot be solved through financial and/or political measures but purely by improvements in the technicality in our existing systems. Theorists sum this up by saying that a resource based economy will create a ‘new incentive system based on human and environmental concern’. These futurists claim that ALL people will not only have all their basic needs satisfied but also enjoy a very high standard of living.
Employment structures would be expected to look very different if such a system of distribution was implemented. This falls under the umbrella of ‘Triple Line Bottom Benefits’, whereby almost all the production processes are almost fully automated. Hence, little human input would theoretically be required to regularly maintain these systems. This basically means that there would be a massive transition into the quaternary sector (for those that do not study geography, quaternary sector activities refer to research, development and innovating existing technology).
Yes, there is no doubt that the entire concept of establishing a complete (Natural Law) Resource Based Economy is highly idealistic. First off, it is assuming that there is a negligible barrier to exponential growth in humans’ understanding and application of science. Although it is true that we are living in the digital era, our technical developments have not (yet) reached the stage where human labour would be completely replaced by them.
It seems as if that the proper functioning of a resource based economy would require a totalitarian authority whose job would be to suppress any form of growth or expression in most forms other than the technicality of things. This would obviously undermine democracy and liberalism that strives to exist.
Above all, do you really think that individuals and communities all around the world would, in fact, be willing to accept such theoretical systems of governing that haven’t been tried and tested previously? What are the consequences of this resource based economy failing to work? Too fatal to give it a try? Probably yes.
Also, it is unclear as to how exactly the transition from ‘money’ to ‘not money’ is supposed to take place. Whether or not such a complicated transition is even practically possible is a question for another day. Imagine the dire consequences of such a moneyless system failing, how would socio-economies cope to survive?
All in all, the resource-based economy appears to be a far-fetched notion withdrawn from reality. However, this does not mean that governments and more importantly people should not completely turn a deaf ear to the alternatives it puts forward. One of this being able to continuously develop and innovate systems (even little things count) for benefits enjoyed mutually.
The value/price of your furniture is determined by the company you buy it from. The value of the car you buy is also determined by a company you buy the car from. What is the value of your money determined by? Government? Banks? Central bank/Federal Reserve? The people? The answer is surprising, it is everybody. The value of the money you have is determined by the laws of supply and demand. Demand wants the price to be low -think of it as a consumer, you want to buy whatever you’re buying for the cheapest price possible- Supply on-the-other-hand wants the price to be high -Think of it as a seller of something, you want to sell whatever you’re selling for as high a price as possible- this means that Supply and Demand can be seen as two straight lines inversely proportional to each other making them look like an X. The price cannot be too low or else suppliers won’t supply but the price cannot be too high or else consumers won’t demand it. The laws of Supply and Demand apply for many aspects of economics and all goods/services. The value of your money is determined at the equilibrium point of supply and Demand -where the suppliers agree to provide the good/service at the price that the Demand deems acceptable- This is seen as the point on the X where the two lines intersect.
Therefore, the value of money is determined by Supply and Demand in your economy. The value can change due to Deflation (Value goes up) and Inflation (value goes down). The value of money drops due to a change in prices of goods and services.
For example: You have 100 KD you go to the bakala to buy 5 boxes of Fanta which costs you 10 Kd. After one year you need to refill your Fanta stock so you once again go to the same Bakala with your 100 KD but this time 5 boxes of Fanta costs you 15 KD, this makes you feel as though you need more money because the value of your money has dropped since you can’t buy as many goods with the same amount of money anymore. Deflation would be the opposite with the price going from 10 KD for 5 boxes to 5 KD for 5 boxes.
Overall, you can’t control the value of your money and the goods/services around you but literally, everybody else (even foreigners) can. Do you accept this possibly worrying reality?
